It earned $7.31 billion in net profit on revenue of $28.57 billion for the June quarter. Both are records for Apple.

Apple's guidance is much lower than expected, but the company is notorious for sandbagging its guidance then delivering a big surprise.

In the release Steve Jobs said, "We’re thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent."

He added, "Right now, we’re very focused and excited about bringing iOS 5 and iCloud to our users this fall."

While there was no hint, or even suggestion about the iPhone 5 in that statement from Jobs, CFO Peter Oppenheimer spilled the beans a little on the call. He said the September quarter would be affected by a "product transition," which suggests we'll see a new iPhone.

Apple's stock was halted for trading when earnings were being released. Once they were out and the stock was trading again, it exploded 8% higher and broke the $400 barrier for the first time ever.

Peter Oppenheimer: Thrilled to announced a bunch of records. Revenue was 82% growth. Tops most recent December quarter record. Tremendous growth from iPhone and iPad. Net income grew faster than revenue.

iTunes with 225 million accounts, people have downloaded over 15 billion songs

5:06: Thrilled with 20.3 million iPhone sales. $13.3 billion in sales from iPhone and accessories. iPhone in Asia Pac quadrupled y/y. 228 carriers compared to 196 at end of March. 5.9 million iPhones in channel inventory. In target range of 4-6 weeks of inventory.

5:08: 55% of Fortune 500 companies testing iPhone driven by app demand. (Note, we lost the call for a few minutes and missed some things ...)

5:10: Alaska airlines using the iPad to replace paper. Continue to be delighted by uses. Reached over 222 million iOS device sales.

Retail: $3.5 billion up 36%. Driven by higher volume of iPads iPhones Macs. 1/2 Macs sold to people that never owned a Mac. Opened 4 new stores. We have 327. Avg $10.8 mill per store. $828 million margin. Store traffic 73.7 million comp to 60.5 mill, up 22%. Customers love personal setup. Set up over 2 million macs, iPads, iPhones, and iPods.

Accounting update: When we deliver Mac OS Lion, you can get future unspecified upgrades from OS X. We will charge for stand alone sales. Revenue from stand alone sales deferred and recognized over three years. Mac customers will have iCloud service access. Combined value is $22, therefore as of June 6, we began deferring revenue for each mac sold and will recognize over 4 years.

5:16: Guidance: revenue to be $25 bill in next quarter, gross margin 38%. OIE to be $50 mill, tax of 24%. $5.50 of EPS. In closing we're extremely happy. Excited about product pipeline. Excited about iOS 5 and iCloud. Open the call to questions.

5:18: Katy Huberty: 12% revenue is very conservative ... can you help us out why you think it will be softer than seasonal? Peter: We have best line up of macs ever expect a y/y increase in sales, expect increase in iPhone, expect y/y growth in iPad. For iPod, expect a decline. As we announced at WWC, a lot going on in the fall, "future product transition" and this will affect our September quarter.

5:20: Tim Cook on cannibalization of iPad over Mac: "We do believe some customers" bought iPad over a Mac. We think more people bought a Mac over the PC. More PC to cannibalize than the Mac. We're happy we grew 14% which is better than the PC market. Increased the supply further, working hard on the balance of the world. Sales of iPad 2 have been a "frenzy" still feel good about ramping up.

5:22: Update on China? Tim Cook: China very key to our results. For a reminder: China, Taiwan, Hong Kong, y/y up over 6X. Revenue $3.8 billion in the quarter. YTD around $8.8 billion. I believe scratching the service.

5:23: The outlook for gross margin, you said 38%, what components and mix with impact that? Peter: We expect GM to be about 38% down sequentially, driven by a different product mix. Loss of leverage ... full q of back to school promotion, and future product transition.

5:25: Tim Cook: Expect components to be favorable but offset by a one time benefit.

5:25: Bill Shope, what is one time benefit? Peter: We saw some benefits in warranty and some settlements. Weren't huge. We see that offsetting component benefit in the Sept quarter.

Shope, how to think about IP strategy and patents? Tim: We have a simple view: "WE love competition, think it's great, but we want people to invent their own stuff. We make sure we defend our portfolio fervently."

5:27: What drove iPhone strength? Tim: Great question, added 42 new carriers and 15 new countries. We continued our expansion efforts. Above 100 countries. The real sequential improvement thanks to emerging and developed markets. China, Latin America, Middle East. Great for Apple, markets Apple has not been strong in traditionally.

5:28: Any sort of milestones to hit for quarter on carriers? Tim: No update, but something that is a great focus to us. want to business with great partners.

5:29: Gene Munster: any thoughts on Android? Tim: Unlike our numbers, you can go to our data sheet and make a reasonable approximation, you can see over 33 million iOS devices in June quarter. We're over 222 million overall iOS devices. So our numbers straight forward, transparent. iPhone up 142% y/y more than 2X rate of growth of smartphone market. Also, as Peter said, we sold every iPad 2 in quarter we could make. Not a shortage of demand. Traction in enterprise. Now our attention turning to getting corporations, converting to penetration, not just pilots. App Store largest by far. iPad over 100,000 apps. Other tablets not getting any traction. And we paid over $2.5 billion. Confident of the product of the App Store of our relationship with developers. Confident w. our roadmap, feel very very good. Data came out from ChangeWave, that reaffirmed that iPhone clear leader in customer satisfaction. We feel fantastic about it.

5:32: Updates on Apple TV? Tim: Continues to do well, but I don't want to mislead. Still call it a hobby because we don't want anyone to conclude it's another leg of the stool. Not in the market size as other products. We love product, customers love the product. We got it right with the new Apple TV. Still hobby status. Continue to invest because we think there's something there.

5:34: Tim on non-Apple retail channel: 115,000 points of sale, incredibly diversified. Through our stores, online, channel diversified.Still countries where we're building the channel. As for suppliers ... dont want to get into any detail. Part of the magic ... are we too centralized? You can bet that the people here that are involved in supply chain are on it.

5:36: Where are we on manufacturing yield on iPad? Tim: Supply "improved dramatically." We added almost 100% on a q/q basis. Allowed us to get into a supply demand balance. Feel good about progress in that area.

5:37: Abramsky from RBC: iPhone growth, how do you sustain, because it's really big ... different form factors? Lower cost? Tim: On tariff side, we dont set the tariffs, ask the carriers about that ... key driver on sequential were emerging markets. You can see more and more energy in these markets.

5:40: Markets with prepay. something you need to address? Tim: Some mix of pre pay, some post paid. We've convinced carriers to do post paid. We know we need to play in prepaid.

5:42: Tim: In terms of why isn't growth higher for Mac? 2 things, I want to list but not quantify. I think some cannibalization of new Macs by iPads. 9+ mill iPads, clearly some bought them over a Mac. Some customers delayed purchase until Lion became available. We're launching it tomorrow. A revolutionary change. Third thing ... in year ago, we launched new MacBook pros. This quarter, iMacs. However, MacBook Pros makes majority of what we sell. So comp more difficult.

Also, 21st straight quarter we beat market on growth.

5:46: Tim on iPad supply ... to talk about July, we're 3 weeks into the quarter, supply has further improved since June quarter, some countries are now in balance. Not going to project the other countries. Trying to get in as many hands as we can.

5:47: Anything different on the enterprise side? Tim: Dual prong strategy, as we work with the carrier sales force ... to be this far into the enterprise with a product only 15 months old like ipad is incredible. Enterprise usually take much longer. People moving at a speed I've never seen. K-12 education market usually takes longer. Sold more iPads K12 than Mac after just 5 quarters is shocking, we would have never predicted that.

5:50: How will iCloud drive things for devices? Peter: We can not wait to get iOS and iCloud in hands of customers. We think we've done it right.We're very very good with internet, delivering goods. Proven for a decade with iTunes and App Store.

5:52: Want to revisit the China issue ... China Mobile a lot of unlocked phones on the network ... How significant is prepay? Tim: Prepaid, or phones sold w. out a contract are very key in China and emerging markets where credit systems not as well established. The iPhone volume for first 3 quarters of fiscal quarter is up 5X and iPhone key driver of 8.8 billion in China for first 3 fiscal quarters. We haven't figured out how to play perfectly, but feel very very good about our progress. We feel very very good about it, taking learnings and applying to other markets.

5:54: Share gains are impressive, but recent data shows lost share on iPhones, can you tell us if gaining share in smartphone is strategically important. How we get minds around sustained share gains? Esp. since phones over $300 will grow slow? Are share gains important? Tim: Share gains are important, anywhere we're going to the opposite way you cna bet were not happy and we're working hard to change that. As for price point, 3GS is $49 with a contact, if you look at the prepay it varies from market to market. But, clearly in a different price from the iPhone 4. Our philosophy the same. Only products were proud of. If we can do that and have the price lower, than we're great with that. A great example is the iPod shuffle. We're proud of it. It's innovative. We only make products we want to own regardless of the price.

5:57: Tim continued, people will spend more if it's a great product and we market it right.

5:58: Brian Marshal from Gleacher, how about media consumption? Tim: People use for a variety of things. Talk to 10 people, 10 reasons they love it. Doing well with a diverse group of people around the world.

5:58: More movies coming to iTunes? Peter: We have a broad selection of movies and TV shows. Adding more each quarter, look for more later this quarter, "some neat stuff coming."